General Insurance Article - IPT costs young drivers GBP 165 a year


According to new research by comparethemarket.com, in 2017, the average amount levied by IPT for a young driver’s (aged 17-24) motor policy was 148% higher than that of the average driver over the age of 24. £165.27 was the average cost of IPT for young drivers, compared to an average of £66.70 for all other age groups.

 Young drivers are being disproportionately punished by the high level of insurance premium tax (IPT), making the cost of getting on road prohibitive to many 17 – 24-year olds, according to new research by comparethemarket.com. Its own data shows that the tax is adding a massive £165 to young people’s annual premiums.

 IPT, which stands at 12% after doubling in the past three years, is priced into the overall premium that drivers are charged. This means that young drivers who face higher car insurance bills face disproportionate increases in the policy that they pay. Young drivers currently pay around £820 more per year for their car insurance than the average motor insurance premium for age groups over 25 years.

 comparethemarket.com is calling on the Government to exempt drivers under the age of 25 from having to pay insurance premium tax, in order to reduce prohibitively high insurance bills and ensure that getting on the road is affordable for the next generation of drivers.

 John Miles, Head of Motor at comparethemarket.com, said: The past three years have seen consistent rises in car insurance premiums for young people. One of the main drivers of this worrying trend is the repeated hiking of insurance premium tax which, having doubled, is making driving an impossible dream for some young people. As it is a flat rate of tax, the hikes in IPT have disproportionately impacted young people as they already pay much more for their car insurance.

 “Driving is essential for many who are looking to secure and maintain jobs and forcing young people, who can afford it the least, to pay such high premiums is a hugely unfair. We believe that the Government should seriously look at an IPT exemption for drivers under the age of 25 to help them get on the road.” 

Back to Index


Similar News to this Story

Insurers can help educate SMEs about cyber attack risk
With increasing technological advances, the risks surrounding cyber-attacks continue to grow and develop. Small and medium sized enterprises (SMEs) ne
Rise in IPT may make many abandon private medical insurance
Brett Hill, Managing Director of The Health Insurance Group comments, “In two years the Government has increased Insurance Premium Tax (IPT) three tim
Insurers divest USD 20bn from insuring Coal based projects
Zurich (with $382 billion of assets) has announced it will no longer insure coal projects and is divesting from existing projects.

Site Search

Exact   Any  

Latest Actuarial Jobs

Actuarial Login

Email
Password
 Jobseeker    Client
Reminder Logon

APA Sponsors

Actuarial Jobs & News Feeds

Jobs RSS News RSS

WikiActuary

Be the first to contribute to our definitive actuarial reference forum. Built by actuaries for actuaries.